Product Concept, Level ,

Classification, Mix and

Product life cycle and its
management
 Learning Outcomes

1.Product Definition
1.2Product Concept
2. Level of Product
3. Types of Products
4. Product Mix
5. Product Life Cycle
(PLC)
6. Business Analysis
7. Innovation Diffusion
8. Packing and Labelling
2
 Product Definition

• Product: Product is anything that can be offered to a

market to satisfy a want or need, including physical

goods, services, experiences, events, persons, places,

properties, organizations, information, and ideas.

 Product
• A product can be anything that can be offered

to the market to satisfy a want or a need.

• A bundle of attributes, offering for

use/consumption by the final customer.

 Level of Product

• Product Levels: The Customer-Value Hierarchy

• Core Product: the service or benefit the customer is really buying

• Generic Product: Generic Product consists of basic feature of the product

• Expected Product: Expected Product a set of attributes and conditions which

buyers normally expect when they purchase the product.

• Augmented Product: The intangible component of the product along with the

generic and core components is called augmented product.

• Potential Product: The Potential Product is the one which encompasses all the

possible augmentation and transformations the product or offering might

undergo in the future.

5
Level of
Product

6
 Levels of Product

5 basic levels

Each level adds more customer value

• CORE PRODUCT

• BASIC PRODUCT

• EXPECTED PRODUCT

• AUGUMENTED PRODUCT

• POTENTIAL PRODUCT

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 Core product

• - Indicate core benefit or service

• - Explains what the buyer really buys

• - Basic step in designing products

• - Defines problem solving benefits/services that consumers seek

• - Standardization of technology does not lead to much of difference

from competing firms

 Basic Product

• At this level, the core benefit is turned into a basic

product.

• Basic step in designing products Unbranded, plainly packaged,

less expensive

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 Expected
product
• Represents basic requirements, a customer
finds essential to buy a product
• - Attributes & conditions required by the customers –
identified-built into products
• - Includes brand name, features, design,
packaging,
 quality level, styling, styling, attributes,
instructions manual

10
 Augmented product

• Marketer prepares an augmented

product that exceeds customer expectations.
• Intangible component of the product
along with formal & core components
• Product built by adding consumer services
& benefits

1
 Types of Products

1. Consumer Products:
• - Bought by final consumers for personal
consumption
• - Categorized as…
• a. Convenience products ;
• - Bought frequently, immediately with
minimum comparison and buying effort.
• - Are low priced
• - Available in many locations 12
 Types of product

• B) Shopping Product;
• - Characteristically compared on the basis of
suitability, quality, price and style while selection and
purchase.
• - Distributed through fewer outlets
• e.g. Furniture, clothing, used cars, major appliances,
hotel and airline services.

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 Types of product

• c. Specialty Product;
• - Has unique characteristics or brand identification for which a
significant group of buyer is willing to make a special purchase
effort
• - People travel even long distances to buy them (Lamborghini)
• - No comparison is involved in buying.
• e.g. Specific brands, types of cars, high priced photographic
equipments, designer clothes, services of medical/ legal
specialists

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 Types of product

• d. Unsought Product
• - Consumer either does not know about/ knows about
but does not normally think of buying it.
• - Require a lot of advertising, personal selling
and marketing efforts.
• e.g. Life insurance, pre planned funeral services and
blood donations.

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 Types of Products
• 2. Industrial Products:
Distinguished from consumer products on the basis
of usage
e.g. A lawn mower.
1. Materials & parts
i. Raw materials & parts:
- Farm products, (wheat, cotton, livestock,
fruits, vegetables)
- Natural products (fish, lumber, crude oils, iron ore)
ii. Manufactured materials & parts:
- component materials (iron yarn, cement, wires)
- Component parts ( small motors, tires, castings)

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 Types of Products

• b. Capital items

i. Installations:
 Major purchases (factories, offices)

 fixed equipment ( generators, elevators,

 computer systems)

ii. Accessory equipments:

- Portable factory equipments and

tools (hand tools, lift trucks)
 Office equipments ( computers, fax
machines, desks)

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 Types of Products

• c. Supplies and Services:

i. Supplies
- Operating supplies (Lubricants, coal, paper, pencil)
- Repair and maintenance (paint, nails, brooms)

ii. Services
- Maintenance and repair services
(window clearing, computer repair)
- Business advisory services ( legal, management,
consulting, advertising)

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 Product Mix

• Product mix – Product mix is a combination of total

product lines within a company.
• The complete range of products present within a
company is known as the product mix.
• A company like HUL has numerous product lines
like Shampoos, detergents, Soaps etc. The
combination of all these product lines is the product
mix.

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 Product Line

• The product line is a subset of the product mix.

The product line generally refers to a type of
product within an organization

• In Nestle, there are milk based products like

milkmaid, Food products like Maggi, chocolate
products like Kitkat and other such product lines.
Thus, Nestle’s product mix will be a combination of
the all the product lines within the company. 20
 Product Mix Length

• The total number of products against the total

number of product lines forms the length of the

product mix. This equation is also known as product

line length.

21
 Product Mix Width

• The width of the product mix is equal to

the number of product lines within a company

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24
 Jitendra Patel,Assistant
9/27/2019 Professor, PIMR 25
Product Life Cycle (PLC)

Saturation
Point

26
PLC

Saturation
Point

27
PLC - Maruti 800

Jitendra Patel,Assistant
9/27/2019 Professor, PIMR 28
 About Maruti

• MARUTI UDYOG LIMITED was established in 1981

• Largest automobile company in India located at
Gurgaon, Manesar.
• Portfolio of 13 brands and 150 variants like,MARUTI
800,ALTO,WAGANOR,SWIFT,GRAND VITARA,SX4
AND SWIFT DZIRE etc.,
• Listed in BOMBAY STOCK EXCHANGE &NATIONAL
STOCK EXCHANGE.
• Honored with “METI” award from Govt. of Japan for
promotion of Japanese brand in India.

29
 Introduction Stage 1983-86

• MARUTI UDYOG LIMITED Launched first ‘MARUTI

800’
,in Indian market on December 1983.
owned MARUTI
• It’s a and SUZUKI MOTOR
collaboration betweenJAPAN.
INDIAN
• STATE
Cheapest car in the Indian market.
• Also exported to countries like South Asia
and South American market.
• First car was presented to Lord Venkateswara of
Tirumala Venkateswara temple.
• First car was sold to Harpal Singh for Rs.48,000/- as a
lucky owner and received keys from Prime Minister of
India INDIRA GANDHI.

30
 Growth Stage 1987-
1996
• MARUTI 800 comes up with new features like , AC version
and Music System in the car.
• Sales by 852 units to 20,269 units and
reached
increasedup to 31,314 units.
• First export began in 1987.
• Sales soared from about 63,763 units
about 1,89,061 unitstoin 1996.
• Strategies adopted:-
• Customer care has became a key element for Maruti,
• Increased Maruti service stations every 25 kms on
a highway,
• For increasing its market share it launched new car models,

31
 Maturity Stage 1997-
2002
• In 1997,MARUTI introduced a new car with Jelly Bean
shape . However it was not so successful in the market.
• Launched revamped version of MARUTI 800 EX, with new
engine, shock absorber, coil spring suspension, but this
model lost their sales gradually .
• Entry of competitors like General
Motors , Ford , Tata.
• In 2002, MARUTI launched ‘ALTO’ ,
with bigger stylish version of the Maruti
800.
• Introduced LPG & CNG variables, called Maruti 800 Duo
with new face lifts like newer grille and clear lens head
lamps

32
 Maturity Stage 1997-2002
Contd…
Strategies adopted at this stage :
• Pricing strategy:– categoring to all segments ,car priced at
Rs.
1,87,000/- is the lowest offer on the road
• Developed different revenue streams in the form of
Maruti insurance, Maruti finance.
• Repositioning of Maruti products
• Introduced new facelifts model based on market responses
or
consumer feedbacks or the competitors moves
• Customer centric approach:
call centers bring Maruti
Partnership with to closer to its customer. OF
BANK INDIA
•organized
Committed tofinance
STATE motorizing India small towns enable
people
to to buy cars in Rs.2599/- scheme

33
 Decline Stage 2002 to
•
2004
Due to heavy competition from competitors like Hyundai
i10 , Maruti Suzuki Swift, Chevrolet Spark, sales of Maruti
800 was drastically decreased.
• The sales went down from 1,51,976 units in the year 2000
to about 69,553 in 2007.
• Buyers are attracted by high end luxuries
small cars like NANO .
• In 2008-2009 experienced sales of only 1,288 units.
• Major competitor Tata Motors launched Tata Nano smaller
car yet offer more space than the Maruti 800
• Sales are continued in semi urban and rural areas till today .
• In 2012 Maruti introduces ALTO 800 in the place of Maruti
800 .

34
Sales between 2000 -
2004

35
 PLC
Explained
• A new product progresses through a sequence
of stages from introduction to growth,
maturity, and decline. This sequence is known
as the product life cycle and is associated with
changes in the marketing situation,
thus impacting marketing strategythe and the
marketing mix.

36
 Introduction Stage
In the introduction stage, the firm seeks to build product awareness
and develop a market for the product. The impact on the marketing
mix is as follows:

• Product branding and quality level is established, and intellectual

property protection such as patents and trademarks are obtained.
• Pricing may be low penetration pricing to build market share
rapidly, or high skim pricing to recover development costs.
• Place/ Distribution is selective until consumers show acceptance of
the product.
• Promotion is aimed at innovators and early adopters. Marketing
communications seeks to build product awareness and to educate
potential consumers about the product.

37
 Challenges of the Introduction
Stage
• Small or no market
• High costs
• Losses, Not Profits

38
 Growth Stage
 In the growth stage, the firm seeks to build
brand preference and increase market share.
• Product quality is maintained and
additional features and support services may
be added.
• Pricing is maintained as the firm
enjoys increasing demand with little
competition.
• Distribution channels are added as
demand increases and customers accept the
product.
• Promotion is aimed at a broader audience.
9/27/2019 39
 Challenges of the Growth
Stage
• Increasing Competition
• Lower Prices
• Different Marketing Appro ach

 Costs are Reduced

Greater Consumer Awareness
Increase in Profits
9/27/2019 40
 Maturity Stage
At maturity, the strong growth in sales diminishes.
Competition may appear with similar products. The
primary objective at this point is to defend market
share while maximizing profit.
• Product features may be enhanced to differentiate the
product from that of competitors.
• Pricing may be lower because of the new competition.
• Distribution becomes more intensive and incentives
may be offered to encourage preference over
competing products.
• Promotion emphasizes product differentiation.

41
 Challenges of the Maturity
Stage
• Sales Volumes Peak
• Decreasing Market Share
• Profits Start to Decrease

Continued Reduction in Costs

 Increased Market Share Through Differentiation

Jitendra Patel,Assistant
9/27/2019 Professor, PIMR 42
 Decline Stage
As sales decline, the firm has several options:
• Maintain the product, possibly rejuvenating it
by adding new features and finding new uses.
• Harvest the product - reduce costs and
continue to offer it, possibly to a loyal niche
segment.
• Discontinue the product, liquidating remaining
inventory or selling it to another firm that is
willing to continue the product.

Jitendra Patel,Assistant
9/27/2019 Professor, PIMR 43
 Challenges of the Decline
Stage
• Market in Decline
• Falling Sales and Profits
• Product Withdrawal

⦿ Cheaper
Production
⦿ Cheaper Markets
44
 Example
s
• Introduction – 3D TVs, Holographic Projection
• Growth – Blueray discs/DVR, Tablet PCs
• Maturity – DVD, Laptops
• Decline – Video cassette, Typewriters

45
Business Analysis
 Business analysis involves the evaluation and
assessment of an organization's processes,
systems, goals, and strategies to identify
areas for improvement and make informed
decisions that drive growth and efficiency. It's
a critical practice that helps businesses
understand their needs, devise solutions, and
ensure they are on the right track to meet
their objectives.
Key Components of Business Analysis

 Understanding Business Needs and Objectives:

◦ Identifying and defining the business problem or
opportunity, and understanding the desired outcomes
and objectives.
 Stakeholder Analysis:
◦ Identifying and analyzing stakeholders, understanding
their roles, interests, and expectations to effectively
manage their involvement and requirements.
 Requirements Gathering and Analysis:
◦ Analyzing, documenting, and validating business and
project requirements to ensure all stakeholders' needs
are captured accurately.
 Process Modeling:
◦ Creating visual representations (flowcharts,
diagrams) to depict the current and future states of
business processes for better understanding and
analysis.
 Data Analysis:
◦ Analyzing and understanding the organization's
data structures, sources, and requirements to
support decision-making and business operations.
 Risk Assessment:
◦ Identifying and assessing potential risks and
uncertainties that may impact the successful
implementation of projects or initiatives.
 Solution Assessment:
• Evaluating proposed solutions to ensure they
meet the defined requirements and align with
the organization's objectives.
Steps in Business Analysis
 Understanding the Context:
◦ Contextualize the analysis within the organization's
structure, industry, and market dynamics.
 Identifying Business Needs:
◦ Collaborate with stakeholders to identify business
needs, problems, or opportunities that need to be
addressed.
 Planning the Analysis Approach:
◦ Define the scope, objectives, methodologies, and
resources needed for the analysis.
 Conducting Stakeholder Analysis:
◦ Identify and engage with stakeholders to
understand their perspectives, expectations, and
concerns.
 Gathering and Analyzing Requirements:
◦ Elicit, document, and analyze requirements using
techniques like interviews, workshops, surveys, and
observations.
 Modeling and Visual Representation:
◦ Develop process models, data models, and other
visual representations to clarify and communicate
requirements and processes.
 Solution Evaluation and Recommendations:
◦ Evaluate potential solutions against defined criteria
and present recommendations to stakeholders.
 Documenting and Communicating Results:
◦ Document analysis findings, requirements, and
recommended solutions in a clear and concise
manner for stakeholders to review and approve.
 Monitoring and Validation:
◦ Monitor implemented solutions, gather feedback,
and validate if they meet the defined requirements
and objectives.
Importance of Business Analysis
 Efficiency and Productivity:
◦ Helps streamline processes, reduce inefficiencies,
and optimize resource utilization, improving overall
productivity.
 Alignment with Business Goals:
◦ Ensures that projects and initiatives align with the
organization's strategic objectives, maximizing the
return on investment.
 Risk Mitigation:
◦ Identifies potential risks and provides strategies to
mitigate them, reducing the likelihood of project
failures.
 Customer Satisfaction:
◦ By understanding customer needs and
expectations, businesses can tailor their products
and services, leading to higher customer
satisfaction.
 Informed Decision-Making:
◦ Provides data and insights to support well-
informed decisions and strategies that benefit the
organization.
 Business analysis is an ongoing process that
helps organizations adapt to changing
environments and market dynamics, ensuring
they remain competitive and successful.
Innovation diffusion
 Innovation diffusion is a theory that explains
how new ideas, products, services, or
technologies spread and are adopted by
individuals, businesses, or communities over
time. It explores the process through which
innovation is communicated, accepted, and
eventually becomes a part of the mainstream.
This theory helps understand the stages and
factors influencing the adoption of innovation
within a specific population.
Key Concepts and Stages of Innovation Diffusion

 Innovators:
◦ The first individuals or organizations to adopt an
innovation. They are risk-takers, often driven by a
desire for novelty and technological advancements.
 Early Adopters:
◦ Early in embracing new innovations after innovators.
They are opinion leaders and well-connected within
their social networks.
 Early Majority:
◦ Members of the population who adopt an innovation
after a relatively longer time but before the average
person. They rely on feedback and experiences of early
adopters.
 Late Majority:
◦ Skeptical individuals who adopt an innovation after
the majority. They do so because of peer pressure
or economic necessity.
 Laggards:
◦ The last group to adopt an innovation. They are
resistant to change and usually adopt only when it's
necessary.
Factors Influencing Innovation Diffusion

 Relative Advantage:
◦ The perceived improvement or advantage of the
innovation compared to existing solutions or
practices.
 Compatibility:
◦ The extent to which the innovation is consistent
with existing values, experiences, and needs of
potential adopters.
 Complexity:
◦ The degree of difficulty in understanding and using
the innovation. Less complex innovations are more
likely to be adopted.
 Trialability:
◦ The ability for individuals to experiment with the
innovation on a limited basis before making a full
commitment to adopt.
 Observability:
◦ The extent to which the results or benefits of
adopting the innovation are visible and easily
observed by others.
Innovation Diffusion Process
 Knowledge: Awareness and understanding of
the innovation.
 Persuasion: Forming a favorable or

unfavorable attitude toward the innovation

based on information.
 Decision: Choosing to adopt or reject the

innovation based on assessment and

evaluation.
 Implementation: Putting the innovation to

use.
 Confirmation: Seeking reinforcement or

validation of the decision to adopt the

innovation.
Importance of Innovation Diffusion
 Strategic Planning: Helps organizations plan
the adoption and implementation of new
technologies or strategies more effectively.
 Marketing and Product Launches:

Understanding the diffusion process aids in

crafting marketing strategies to target
different adopter categories.
 Policy and Education: Influences policy

decisions and educational strategies to

promote the adoption of beneficial
innovations.
 Competitive Advantage: Businesses can gain
a competitive edge by understanding and
capitalizing on the adoption patterns of their
target audience.
 Societal Change and Progress: Supports the

overall progress and development of societies

and economies by encouraging the adoption
of valuable innovations.
 Understanding innovation diffusion is crucial
for businesses, policymakers, and innovators
to facilitate the successful adoption of new
ideas and technologies, ultimately leading to
positive societal and economic impacts.
Packaging and Labelling
 Packaging and labeling are critical
components of product marketing and
consumer interaction. They play a significant
role in attracting consumers, communicating
essential information, ensuring product
safety, and complying with regulatory
requirements.
Packaging

 Protection and Preservation:

◦ Packaging protects products from damage,
contamination, and spoilage during storage, transit,
and handling.
 Attraction and Visibility:
◦ Packaging design and aesthetics attract consumers
and create a distinct identity for the product on
store shelves.
 Information Communication:
◦ Important product details, instructions for use, and
safety information are often printed on packaging.
 Functionality and Convenience:
◦ Packaging should be functional, easy to handle, and
convenient for consumers to use or store the
product.
 Sustainability and Environment:
◦ Modern packaging considers environmental impact,
aiming for sustainability through eco-friendly
materials and efficient use of resources.
 Compliance and Regulations:
◦ Packaging needs to comply with legal and
regulatory requirements, including materials,
safety, and labeling standards.
Labeling
 Product Identification:
◦ Provides necessary product identification, including
brand name, logo, and product variant.
 Ingredient Information:
◦ Lists the product's ingredients and nutritional
information, crucial for consumers, especially those
with allergies or dietary restrictions.
 Usage and Instructions:
◦ Provides directions for use, storage instructions,
preparation methods, and any necessary
precautions.
 Legal and Compliance Information:
◦ Includes regulatory information such as batch
numbers, expiry dates, safety warnings, and
compliance with industry standards.
 Marketing and Promotion:
◦ Serves as a marketing tool, conveying product
benefits, promotional offers, and other marketing
messages.
 Barcodes and Pricing:
◦ Includes barcodes for efficient point-of-sale
scanning and pricing information for retailers.
 Consumer Engagement:
o QR codes or other interactive elements may
be used to engage consumers, offering
additional information or promotions when
scanned.
Importance of Packaging and Labeling
 Consumer Decision-Making:
◦ Packaging and labeling influence consumers'
purchasing decisions by conveying product quality,
safety, and benefits.
 Branding and Differentiation:
◦ Packaging design and labels help create a unique
brand identity, distinguishing the product from
competitors.
 Product Information and Safety:
◦ Provide essential product information, usage
instructions, safety warnings, and regulatory
compliance details, ensuring consumer safety.
 Legal Compliance:
◦ Adhering to legal and regulatory requirements for
packaging and labeling is essential to avoid
penalties and maintain consumer trust.
 Supply Chain Efficiency:
◦ Well-designed packaging and labels aid in efficient
inventory management, shipping, and storage
throughout the supply chain.
 Sustainability:
◦ Eco-friendly packaging and clear labeling of
recyclability contribute to a company's
sustainability efforts and appeal to environmentally
conscious consumers.
 Effective packaging and labeling strategies
are crucial for businesses to maximize
product visibility, meet legal requirements,
ensure consumer safety, and enhance brand
recognition, ultimately contributing to
business success and customer satisfaction.
 Reference
s
1. Aakar, D. A. (2012), “Strategic Market Management” 9th Edition, New Delhi,
India, Wiley India.
2. D. Chandra Bose (2010.) “Modern Marketing Principles and Practices” PHI
Learning, 1st Edition.
3. Kotler , P (2015) “Five Product Levels by Philip Kotler” retrieved from
https://www.toolshero.com/marketing/five-product-levels-kotler/ last assessed
on 10 September 2019.
4. O. C. Ferrell and Michael Hartline (2012 ).“Marketing Strategy, Text and
Cases”, South Western Cengage Learning, sixth edition.
5. Philip Kotler, Kelvin Lane, Keller, Abraham Koshi, Mitihlesh Jha.(2011), Principles
of Marketing Management, South Asian Perspective, Pearson Education, 14th
Edition.
6. S. M. Jha. (2011), “Services Marketing”, Himalaya Publishing House, 7th Edition,
New Delhi.
7. The Product Life Cycle (2010), retrieved from
http://www.quickmba.com/marketing/product/lifecycle/ last assessed on 10
September 2019.

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